JEFFJAGUAR

This is what's really galling about this whole thing. I was just doing a google search on Citibank chip and pin credit cards. One of the hits was a citibank site which explained the whole issue of credit cards that contain chips. The web site was in English Upon further review, the web site was Citibank Romania. So for their customers in Romania (as well as I am sure other places), Citibank is issuing chip and pin cards. That means the proper software is already in place to process chip and pin transactions.

Yet for their United States customers, who I suspect make up the majority of their customers, they have not issued any chip and pin cards and apparently are being dragged into this very very slowly by only offering such cards to their top of the line carrds with the large annuals fees.

What a bunch of slime if you ask me.

It would seem to me this whole matter could be resolved tomorrow if only the US government did what governments throughout the world have done namely enter the 21st century or is it that the US will insist on this, as well as so many other archaic, we're sane and the rest of the world is crazy, things such as continuing to use outdated units of weight, measure and temperature and costing the Treasury millions by continuing to issue insignificant $1 bills when the rest of the more enlightened world no longer issue paper money for amounts so small. And we think we're really advanced over here.

garyschmitt

It's tempting to think that Citibank Romania = Citibank USA. But these are very different banks, and it only makes sense to think of them as entirely different banks. The only thing that's the same is the logo and the ability of the different subsidiaries can bail each other out of trouble.

If you have a US Citibank account and a non-US Citibank account, you can't link them. You can't freely move money between them as you can between two accounts in the same country (it will cost you as if you were transferring from entirely different banks). If you walk into a Citibank Romania branch with your Citibank US account, they won't be able to give you service. They won't even be able to access your account.

If you have a Citibank Japan account, you can get your electronic statements delivered, via encrypted email attachment. Why doesn't Citibank US do this? It's not a legal difference (a few US banks will email your statements). It's different banks.. different software and different databases. Shared branding is a marketing scheme.

Even if you assume the US-headquartered bank did not simply outsource the production of the EMV cards for the European subsidiaries, having the technology is trivial. The significance here is not the cost of innovation, but the business impact of the implementation.

American Express had EMV chips in some of their US-issued Blue cards, but it failed and was abandoned. You can no longer get an EMV amex blue card in the US.

The US gov. already imposes laws making banks liable for fraud (which is quite favorable for the consumer). It would not make any sense to simultaneously impose a technology and all the risks that it brings, particularly when it's riskier. It would introduce accountability without responsibility. If you're going to make someone accountable, then make them responsible so they have control over their liabilities.

A mandate would also effectively block or stifle other competing innovations (like dynamic magstripes). Also, the general philosophy in the US is to let the free market decide. It's not like Europe, where businesses are told how they must conform and what to offer at the micro level. We do not want the government deciding the features a bank decides to promote.

Rather than impose an unfunded mandate to force all your local banks to give you a feature that will enable you to pay at all intercity fuel pumps outside the US, why not get a USD-denominated EMV card from Barclays offshore?

So you would kill the current strip dancing industry and force it to change radically, so you can have the benefit of blocking people from handing you a dollar bill, via mandate? The 1 dollar coin exists. You can use it if you want.

Why do you need to kill things? It's better to be permissive, and simply allow the better approach demonstrate its superiority by winning in a fair competition of ideas.

biggestbopper

How interesting. So the banks should do whatever they want because the market will somehow keep them under control?

That could, IMHO, lead to a lot of problems and, perhaps, even, a financial collapse.

Didn't Santayana say: "Those who cannot remember the past are condemned to repeat it?" @:-)

In any event, sure would be nice to get a U.S. card that worked to buy gas in France, Switzerland, etc. over the weekend. And that was a little more secure than the aged and obsolete mag stripe system U.S. banks refuse to improve.

JEFFJAGUAR

Gary....no I don't expect things to happen overnight. But as I've said, why would it be so difficult to begin a transition now to emv by issuing emv cards to all those who feel they need them at cost? I just don't get the problem with that.

As far as government regulation of certan things, government exist to work for the well being of the people (I'll stay out of politics on this). While you may not think it's earth shaking, the fact is report after report has come out showing the US Treasury is losing money on continuing having to replace $1 bills. Sure it's a drop in the bucket but it's still something whose time has obviously come. You say well we have a choice in this country and old habits are hard to break. You know and I know the reason the $1 coin has not proven popular is that it looks so puny. Ever see a British £1 coin? You reach in your pocket and you know it's a £1 coin. The British may not have wanted to de-monteize the £1 bank note but they saw the practicality of it and now have a nice large £2 coin also The same was true when Europe went on the euro. There is no €1 bank note but a nice distinctive looking coin. I'm sure most here know out the loonie and the twonie. I could go back further and speak about the substitution of the £/s/d system in the UK and Ireland. People said no, never. Yet it was imposed by the government and people would not think about going back the other way.

The US does the same thing with his refusal to adopt Celsius instad of Farenheit. Its continued insistance of using gallons instead of liters. Of course there might be an inconvenience and perhaps it might take a while to substitute kilometers for miles (even the Brits managed to get the eu to allow them, for the time being, to keep miles). But we do live in a world community and are part of it.

The same thing is true here on this topic. It's almost ludicrous this reluctance on the part of the US banks to do this voluntarily. I'm sure many in the British payments industry objected to the imposition of chip and pin but it was forced down their throats, I think, by the whatever the British equivalent is of our banking regulators partially because it was going on throughout the world, partially because it would cut down on fraud. That is the role of government. Have there been snags along the way? Is it 100% fraud proof? Who knows but increasingly, Americans who do travel are being inconvenienced and should not be told things like oh they're required to take our obsolete archaic cards yada yada yada.

There are other things I could carry on about. I have now become very unpopular in many restaurants. Why? I will not allo them to take my credit card away from the table where it can be cloned. That practice should be outlawed. Either you pay at the cashier or they do what they do throughout Europe namely bring a terminal to your table where the transaction is performed in front of your eyes. Yes there is a cost involved but you have to start somewhere. In one British chain I eat at quite a bit, they bring the terminal to your table, swipe the card and hand you the terminal to enter the tip. Modern 21st century technology you don't see in the USA. Oh, you hear, emv technology is already obsolete so why bother. Let's just wait till the next best thing comes along. Like when I refused to get a 286 processor waiting for the 386 to come along and then waiting for larger memory and so on and so forth. At a certain point, you have to take advantage of what's available now and upgrade later or else I would never have gotten my first computer.

You just get the feeling that the USA prefers to be contrary minded and sometimes it does behoove government to take the bull by the horns and do the right thing. Like I say, yes I understand it would be expensive to change all the terminals immediately but there is absolutely nothing to keep issuers from beginning the transition. That's the issue here.

sushanna1

garyschmitt

To think that chip & pin would have prevented a financial collapse is quite delusional. It's one thing to regulate by prohibiting parasitic activities that destructively game a system (rogue trading, subprime loans) -- it's quite another to regulate by forcing innovation, and doing it in a way that legally forces one particular technology to dominate another. Those in Congress are too old to be deciding technology for consumers.

All your US cards will work in those places. What you need to know is that it's intercity fuel stations that are unmanned. Fuel stations that serve highways are manned and take cash or magstripe. If you're in a large city and will soon need fuel, you need not drive around aimlessly.. just go to a nearby highway (or get a Barclays card).

It's a common misconception that the European chip & pin cards are more secure. They're actually less secure than the older magstripe cards, because they carry all the vulnerabilities of both magstripe and emv. Yes, these cards can still be skimmed in the same way. And indeed, this is the danger of letting Congress (and the lobbyists who manipulate them) decide which is more secure -- they would think the same thing without realizing, and perhaps inadvertently block innovations that are actually more secure.

garyschmitt

So you agree that the government works for the well being of the people, yet you don't trust people to directly define what's in their own best interest (yet these representatives were elected by the same people you don't trust to have good judgment). Having both $1 bills and coins means you have choice. Supply and demand. The dollar bill would be obsoleted if enough people agree with you, and insist on only coins.

I'm on the fence on this one. Unlike chips and magnetic media, the gov. has picked a side, and therefore has a responsibility to get it right. I'm not sure you're aware of the astronomical cost of changing units of measure. It's unreal. If the cost of making the change were reasonable I would agree with you. You have to compare the cost of changing against the cost of maintaining different systems.

It may have cut down on fraud, but look who took the hit when there was fraud. British consumers (who the UK government is expected to protect) were getting burnt up until 2009, until the liability laws were updated to protect consumers from PIN forgery.

That's absurd. You're being silly because whether the rogue mag reader is installed in a wired terminal or a wireless one makes no difference. You're only protecting your bank from someone who might have a duffel bag with their own gear. If you want to ensure that your bank (who actually has the liability) does not have to worry about cloning, follow the waitress to the terminal. You should be unpopular if you ask them to bring their 10 kg. wired terminal to you. Even in Europe you sometimes must walk over to a wired full size PoS to enter your pin.

This is less secure. Wireless terminals have already been hacked. The fraudster does not even need to know your pin -- they just send a wireless signal that states that a valid pin was entered, even when it wasn't.

JEFFJAGUAR

Gary...In all due respect, I think you're missing the point some of us are making. It is really not an issue which is less subject to fraud any longer. The fact is more and more Americans are being extremely inconvenienced by their inability to use their credit cards in many places that are big tourist spots for Americans. Train tickets in Holland even at manned locations no chip no sale. Many of the metro machines in Paris do not take American credit cards and in many of those stations the window is no longer manned (or womanned)...I had such a situation occur last June when I wanted to buy a mobilis ticket and the clerk said to use the machine. I kept saying pas de chip...showed my credit card and reluctantly she sold me the ticket but often that window has nobody there. ?That is a big inconvenience. I can't imagine travelling or buying groceries or payng for meals and not using a credit card and I am sure you will agree the instances where the Americ an cards (I will leave out the adjectives suc h as obsolete and archaic) are not accepted.

Let me give you an analogy. For years, I went to Europe and didn't take any electrical devices with me because of the difference in voltage. It was not necessary for the most part. But today I travel to Europe, I take my notebook computer, I take my digital camera whatever. And no I don't think the USA should change its voltage system. But they've solved the problem. Most of the battery chargers today are dual voltage and work on either 110V in North America and 220-240 volts in much of the rest of the world. All you need do is pick up an inexpensive plug adapter. Problem solved.

Credit cardd issued in Europe still contain magnetic strips so those customers are not inconvenienced when travelling to the USA.......it is funny that in some locations the "security" is asking for a zip code and since Europeans don't have zip codes, they can't use the automatic machines. In this country, we have very few locations, nowhere near what they have elsewhere, where gas stations are not manned even on Sundays. I don't know of any quite frankly. So Europeans and Canadians and Japanese are hardly ever inconvenienced because they credit cards are dual voltage so to speak, are they?

Yes, something more secure is probably around the corner, but then again so is Christmas. There is no reason we don't have dual voltage credit cards and if the USA doesn't want to start changing the pos terminals, although many merchants already have, that's fine. We can have, and not for very much money, the best of both worlds.

I just don't get why you or anybody would be so adamantly opposed to this simple matter.

garyschmitt

Huh? I can't interpret what you just said -- but along these lines, I will say that people erroneously believe cards that contain both a magstripe and EMV chip are more secure, when in fact they are less secure. It's really not in the interest of someone advocating these more convenient cards to bring up security. I think they bring it up in hopes that they will be able to add importance to their agenda (which at the end of the day is really just driven by an excessively unhealthy craving for convenience, regardless of the inconvenience they cause in making it happen).

It's silly in so many respects because the cards are less secure, technologically, and from the standpoint of the user they are legally less secure. The only thing they have going for them is interoperability (i.e. convenience). You can only successfully make a claim about the convenience of them.

So many Americans need to buy fuel in downtown Amsterdam that it's amazing that no US banks have found it worthwhile to take such a huge market share for themselves by offering European-style chip and pin.

Supply and demand.

I have not seen any vending machines that are anywhere near replacing a grocery store. Although I know where there is a vending machine with some basic things like milk.. I'll have to see what form of payment it takes. Meals will never be a problem -- we are nowhere near having unmanned restaurants. Not even McDonalds has pulled that off.

Luckily the problem was not solved by regulation. Innovation solved the problem; innovation and demand. Had the problem been solved by legislation, there would be a whole host of side-effects potentially hindering the next innovation.

At most, I would say legislation should require products with single voltage PSUs to disclose this on the box. But world travelers should not impose their needs on non-travelers by legislatively forcing appliances to be dual voltage, for example, raising their prices for benefits they won't make use of.

Europeans do have zip codes, and in fact some European stores ask for a zip code when using plastic. This is not for security -- it's to feed their marketing databases. Privacy advocates should refuse to give a zip code.

I'm not sure why you don't take the American approach, and vote with your feet. Reward those offering what you want, and open an account with chip and pin. To the extent that you claim to be inconvenienced, I'm not sure why you have problem with this.

sdsearch

Of course it failed. Why Blue??? The early need for EMV for US-based card holders was (and continues to be) for those who travel internationally. Since when is Blue the Amex-issued card most used by people who travel internationally???

Amex has Membeship Rewards cards (including ones that include lounge access around the world as a perk), international airline cards (Delta), international hotel cards (Hilton), and yet it ran the EMV experiment on Blue???

i'm trying to figure out who is more brain-dead on EMV, the banks who haven't tried EMV yet, or Amex for having tried it in the most bone-headed fashion possible (and thus having decided that it doesn't work)?

sdsearch

The problem is measuring "demand". I bet even most customers who run into this don't demand. I wouldn't be surprised if most customers who run into this don't even know the problem is a lack of chip in their card.

Swipe cards don't work in Italian train system kiosks. I was standing in line at the Venice train staion about a month ago, and noticed several people around me (who all turned out to be Americans) saying "I tried to buy a ticket in the kiosk, but my card didn't work" as they stood in line around me. They didn't know that it was because they needed a card with a chip, they just knew it didn't work, and they got in line to pay at the counter instead. They didn't notice the pattern (and hadn't of course reat on FT about the pattern) that everyone who had a chip card could use the kiosk, everyone who had a swipe card (meaning, by now, mostly US-based travelers) coudln't. In fact, some of them thoguht it was the ordinary issue of their card being worn out! So I bet they wouldn't think to call their bank to ask why their card didn't work but all the credit cards people from other countries had did work.

The demand is only going to be from savvy traveelers until more people learn why their card just now didn't work in that koosk overseas.

And, btw, I'd say a high percentage of travelers have tried cards in train and subway ticket kiosks in various countries and have had them fail, but the problem is not that not enough people run into this issue, it's that not enough people realize why they ran into this issue enough to ask for a chip & PIN card.

(I myself don't know if and when I would have understood this problem had I not been reading about it for years on FlyerTalk. I don't remember reading about it much if at all anywhere else, that wasn't an artilcle I only read because it was linked here.)

garyschmitt

Travelers who are EMV-aware are just as likely to misunderstand why their card is being denied. Americans tend to automatically presume that their credit card is rejected by the Spanish metro for not having a chip, when the actual problem is geographical location of the issuing bank. IOW, the Spanish metro rejects some (or all) chip and pin cards that are foreign (i.e. not issued in Spain). Would be useful if we could get meaningful denial messages instead of something like "this card is rejected". I've never seen a machine give meaningful feedback. The only way to immediately know for certain that your card is rejected on the basis of technology is if the kiosk does not mechanically suck the card in far enough to read a magstripe. Same with mobile phone providers. Mobile phone providers commonly want it to be difficult for non-residents, and will reject all foreign cards. Same with buying train tickets online. An online payment system that accepts number entry has no reason to discriminate on whether a card has a chip, but some of these systems will proactively block the usage of foreign cards.

In any case, you're setting yourself up for disappointment if you think chip and pin will remedy acceptance problems. It will only remedy the cases where the merchant is not simply blocking foreign cards. Cash is still king offline. Cash still works on more offline transactions than any other payment form in the world.

It's a violation of the merchant agreement to block foreign cards, but because Visa Europe does not enforce that rule, it's broken with disregard in Europe.

percysmith

Can anyone tell me how Chip and PIN can be superior to Chip and Sign during disputes?

The cardholder definitely benefits by moving from magstripe to chip.

But I can't see how the cardholder can benefit by moving from signature to PIN. Banks can benefit (fewer successful disputes) and merchants can benefit (lower staffing requirements and chargebacks) but not the cardholder.

jamar

Because not everybody wants to lock up the US$ equivalent of £5k in an account or pay a monthly fee otherwise. I'll be opening a Canadian bank account and chip card first chance I get, because the required balance is lower($1k for a basic CIBC checking account and I'll also attempt to get a CC), though. In other words, voting with the feet only works as long as there's somewhere to go. If it weren't for the fact that I go to Canada every so often, I couldn't do it.

And I disagree with the assertion that all regulation is bad, but mostly because of personal experience (China: regulation kept banking fees down compared to America).

And speaking of China, I feel the UnionPay approach is best regarding percysmith's question - Stripe/chip+PIN+signature. Chip OK, PIN OK, bad signature=fraud and hopefully a successful dispute. Well, that's how it is on China-issued UnionPay cards, at least. If HK cards don't use all 3, I think that's a security hole.

garyschmitt

So you not only want convenience, but you expect to get it for free. It's always great when we can get things for free, but regulation is not the way to do this. You get something for free when the supplier realizes there's a profitable incentive for them to offer it.

There are several places to go (not just Barclay's). You don't like the price of convenience. In this case, you're still actually voting with your feet -- you're voting in favor of price over the convenience of chip & pin. Barclay's is losing your business because their minimum balance is too high.

No one made such an assertion. If you're referring to my stance, I don't believe regulation is an appropriate way to force businesses to offer frills, convenience features, and luxury items. A good use of regulation is to block someone from damaging someone else -- not to force a company to offer free conveniences for their clients who aren't willing to pay market price for the feature.